Changes to Street Vacation Compensation Law

MRSC, September 5, 2001

The state law governing street vacations undertaken by cities and towns has been amended by Chapter 202, Laws of 2001. Until this July, cities and towns were only allowed to seek compensation not to exceed one-half of the appraised value of the area vacated. Under the new statute, the city or town may seek up to the full appraised value of the area vacated as compensation, provided the street or alley has been part of a dedicated public right-of-way for at least 25 years. (The statute is permissive; compensation is not required to be sought by the city or town council.)

Another change initiated by chapter 202 is how the compensation raised by the vacation may be spent. Previously use of the proceeds was unrestricted. Under the new law at least one half of the revenue received as compensation must be dedicated to the acquisition, improvement, development, and related maintenance of public open space or transportation capital projects within the city or town." This new limitation applies whether the city or town seeks only one-half the appraised value as compensation, as previously was allowed, or full appraised value, as now allowed by the 2001 amendment. The county provisions governing the vacation of roads and bridges were not amended in 2001.